Lee Hyo-sik is Finance Desk editor at The Korea Times. He manages finance-related stories on macroeconomics, banks, stocks, bonds, crypto etc. He is passionate about covering what's happening in Korea's financial industry and explaining it to both Korean and non-Korean readers. You can reach him at leehs@koreatimes.co.kr. Your insights and feedbacks are always appreciated.
Entrepreneurship on bottom rung
By Lee Hyo-sik
Koreans are lagging far behind their counterparts of other advanced countries in entrepreneurship as they are more reluctant to start a business. They are also found to be more fearful of failure, and prefer to work for someone else rather than take risks running their own businesses.
In contrast, Asia’s fourth largest economy is rated within top 10 in the startup environment among major global economies.
According to an annual report titled ``Entrepreneurship at a Glance 2012,’’ released Monday by the Organization for Economic Cooperation and Development (OECD), only 11 percent of the surveyed Koreans were willing to start a business.
The report provides an overview of entrepreneurship in OECD countries, using various indicators to explain how access to finance, market conditions, regulatory frameworks and cultural perceptions can boost or harm entrepreneurial activity.
About 27 percent of respondents said they are capable of running their own businesses, while 45 percent were found to be afraid of failure, the second highest ratio after Israel. The OECD surveyed 34 member economies and six other major developing nations. Non-member countries include China, Brazil, India, Russia, Indonesia and South Africa.
According to the report, Korea was the seventh most business-friendly place for startups. Japan and China were rated 30th and 38th, respectively. New Zealand topped the list, followed by Australia, Canada and the United States.
Those planning to establish a company here were found to have had to undergo five separate procedures on average at various government agencies, fewer than six in the United States, eight in Japan and 14 in China. In New Zealand and Canada, entrepreneurs need to go through only one integrated process.
The OECD report also said it takes seven days on average to start a new business in Korea. But in New Zealand, it was possible to set up a company in a day.
The Paris-based organization then said start-up rates in most countries are slowly bouncing back toward pre-crisis levels, but not all countries have seen significant acceleration in new businesses.
Most would-be entrepreneurs see far greater opportunities in the service sectors than in manufacturing. And women are far less likely than men to open their own businesses.
France has shown the most spectacular increase in new businesses, due to introduction of a simplified start-up procedure. Australia and the United Kingdom reported robust growth in business creation in late 2011 and Norway has grown steadily, but the number of newly created enterprises remains below its pre-crisis level in most countries surveyed.